TPC 8-K
Tutor Perini Corp (TPC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of Principal Executive Offices, and Zip Code)
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(Registrant’s Telephone Number, Including Area Code)
None
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition
On May 6, 2020 Tutor Perini Corporation issued a press release announcing its financial results for the quarter ended March 31, 2020. A copy of that press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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Exhibit Number | Description | |
99.1 | ||
104 | The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101). | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| TUTOR PERINI CORPORATION | |
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Date: May 6, 2020 | By: | /s/ Gary G. Smalley |
| Gary G. Smalley | |
| Executive Vice President and Chief Financial Officer | |
News Release
Tutor Perini Reports First Quarter 2020 Results
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Revenue of $1.3 billion, up 30% Y/Y, driven by the ramp-up of large infrastructure projects |
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Strongest first-quarter revenue growth in the past 8 years |
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Diluted earnings per share (EPS) of $0.34, the highest first-quarter EPS in the past 10 years |
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Backlog remains healthy at $10.6 billion, with several large civil projects bidding later this year |
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Affirming 2020 EPS guidance of $1.80 to $2.10 |
LOS ANGELES – (BUSINESS WIRE) – May 6, 2020 – Tutor Perini Corporation (the “Company”) (NYSE: TPC), a leading civil, building and specialty construction company, reported results today for the three months ended March 31, 2020. Revenue was $1.3 billion, an increase of 30% compared to $1.0 billion for the same period last year. The increase was driven by strong year-over-year growth across all segments, particularly 46% and 47% growth for the Civil and Specialty Contractors segments, respectively, as a result of large infrastructure projects that are accelerating, including Newark Airport Terminal One, the Purple Line Extension projects in Los Angeles, California High-Speed Rail and Minneapolis Southwest Light Rail.
Income from construction operations for the first quarter of 2020 was $47.2 million, more than double the $22.9 million reported for the same period in 2019. The increase was primarily due to contributions associated with the strong revenue growth across all segments, as well as improved performance on various projects in New York in the Specialty Contractors segment. Net income attributable to the Company for the first quarter of 2020 was $17.4 million, or $0.34 per diluted share, compared to a net loss attributable to the Company of $0.4 million, or a $0.01 loss per diluted share, for the same period last year.
First quarter 2020 backlog remained healthy at $10.6 billion compared to the record backlog of $11.6 billion reported for the same quarter last year. The prior year’s record backlog was driven by the timing of $3.2 billion of new awards and contract adjustments booked during that period, demonstrating the variability that can occur in our backlog due to timing of large project awards. For the first quarter of 2020, new awards and adjustments to contracts in process totaled $0.6 billion, with the most significant new awards being three military projects in North Carolina and Florida collectively totaling $133 million and a $64 million mining project in Alabama. The Company is preparing to bid on several large civil projects this year and anticipates that backlog will continue to support strong revenue growth.
The Company used $34.0 million of operating cash in the first quarter of 2020, a significant improvement compared to the use of $124.8 million for the same quarter of last year and better than expectations. Cash generation for the current quarter was impacted by the timing of collections and the timing of payments to suppliers and subcontractors, but also affected by the seasonality of the Company’s operations. Barring any significant impact from the COVID-19 pandemic, the Company continues to anticipate that substantial cash collections pertaining to expected dispute resolutions in 2020, combined with significant project cash flows from large projects that are ramping up, will contribute to strong operating cash flow for the rest of this year.
Outlook and Guidance
“We are off to a solid start in 2020, delivering the strong revenue and earnings growth we have anticipated as the large projects awarded to us over the past couple of years accelerate and contribute more significantly,” remarked Ronald Tutor, Chairman and Chief Executive Officer. Tutor continued, “We expect continued revenue and earnings growth this year, driven by our large backlog and improved operating performance in the Specialty Contractors group. As mentioned
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last quarter, we are pursuing various new high-margin project opportunities and expect to make significant progress this year and next year in resolving and collecting our unbilled receivables.”
The COVID-19 pandemic did not significantly impact the Company’s financial results for the first quarter of 2020. The vast majority of the Company’s projects, especially in its Civil segment, have been designated as essential business, which allows the Company to continue its work on those projects. However, due to the fluidity of the COVID-19 pandemic, the Company is unable at this time to accurately predict the pandemic’s future impact on the Company’s business, financial condition or performance. Notwithstanding this uncertainty, since the majority of the Company’s projects have, as mentioned above, thus far been deemed essential and been largely unaffected by the pandemic, the Company does not currently foresee any adverse material impact from the pandemic on its financial results for this year.
Accordingly, based on the Company’s results to date in 2020 and its current outlook for the remainder of the year, the Company is affirming its EPS guidance and still expects EPS to be in the range of $1.80 to $2.10. As in previous years, earnings in 2020 are expected to be weighted more heavily in the second half of the year due to the anticipated continuation of large project ramp-up activities, as well as typical business seasonality.
First Quarter 2020 Conference Call
The Company will host a conference call at 2:00 PM Pacific Time on Wednesday, May 6, 2020, to discuss the first quarter 2020 results. To participate in the conference call, please dial 877-407-8293 five to ten minutes prior to the scheduled time. International callers should dial +1-201-689-8349.
The conference call will be webcast live over the Internet and can be accessed by all interested parties on Tutor Perini's website at www.tutorperini.com. For those unable to participate during the live call, the webcast will be available for replay shortly after the call on the website.
About Tutor Perini Corporation
Tutor Perini Corporation is a leading civil, building and specialty construction company offering diversified general contracting and design-build services to private clients and public agencies throughout the world. We have provided construction services since 1894 and have established a strong reputation within our markets by executing large, complex projects on time and within budget, while adhering to strict quality control measures. We offer general contracting, pre-construction planning and comprehensive project management services, including planning and scheduling of manpower, equipment, materials and subcontractors required for a project. We also offer self-performed construction services including site work, concrete forming and placement, steel erection, electrical, mechanical, plumbing and heating, ventilation and air conditioning (HVAC). We are known for our major complex building project commitments, as well as our capacity to perform large and complex transportation and heavy civil construction for government agencies and private clients throughout the world.
Forward-Looking Statements
The statements contained in this release, including those set forth in the section “Outlook and Guidance,” that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, statements regarding the Company’s expectations, hopes, beliefs, intentions or strategies regarding the future and statements regarding future guidance or estimates and non-historical performance. These forward-looking statements are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. While the Company’s expectations, beliefs and projections are expressed in good faith and the Company believes there is a reasonable basis for them, there can be no assurance that future developments affecting the Company will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the impact of the COVID-19 pandemic and related events that are beyond our control,
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including possible effects on our business and operations, customers and suppliers, and employees, contractors and subcontractors, which could affect adversely our projects and the geographic regions in which we conduct business; a significant slowdown or decline in economic conditions; revisions of estimates of contract risks, revenue or costs, the timing of new awards or the pace of project execution, which may result in losses or lower than anticipated profit; unfavorable outcomes of existing or future litigation or dispute resolution proceedings against clients (project owners, developers, general contractors, etc.), subcontractors or suppliers, as well as failure to promptly recover significant working capital invested in projects subject to such matters; the requirement to perform extra, or change order, work resulting in disputes or claims or adversely affecting our working capital, profits and cash flows; risks and other uncertainties associated with assumptions and estimates used to prepare financial statements; inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers; failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers; failure to meet our obligations under our debt agreements; decreases in the level of government spending for infrastructure and other public projects; downgrades in our credit ratings; failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses; client cancellations of, or reductions in scope under, contracts reported in our backlog; increased competition and failure to secure new contracts; impairment of our goodwill or other indefinite-lived intangible assets; the impact of inclement weather conditions on projects; possible systems and information technology interruptions, including due to cyberattack, systems failures or other similar events; failure to comply with laws and regulations related to government contracts; the potential dilutive impact of our Convertible Notes in our EPS calculation; economic, political and other risks, including civil unrest, security issues, labor conditions, corruption and other unforeseeable events in countries where we do business, resulting in unanticipated losses; uncertainty from the expected discontinuance of the London Interbank Offered Rate and transition to any other interest rate benchmark; conversion of our outstanding Convertible Notes that could dilute ownership interests of existing stockholders and could adversely affect the market price of our common stock; and other risks and uncertainties discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 26, 2020 and in other reports that we file with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Contact:
Tutor Perini Corporation
Jorge Casado, 818-362-8391
Vice President, Investor Relations & Corporate Communications
www.tutorperini.com
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Tutor Perini Corporation |
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Condensed Consolidated Statements of Operations |
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Unaudited |
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Three Months Ended |
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March 31, |
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(in thousands, except per common share amounts) |
2020 |
2019 |
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REVENUE |
$ |
1,250,729 |
$ |
958,487 | |
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COST OF OPERATIONS |
(1,139,649) | (870,017) | |||
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GROSS PROFIT |
111,080 | 88,470 | |||
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General and administrative expenses |
(63,853) | (65,557) | |||
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INCOME FROM CONSTRUCTION OPERATIONS |
47,227 | 22,913 | |||
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Other income, net |
481 | 422 | |||
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Interest expense |
(16,436) | (16,425) | |||
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INCOME BEFORE INCOME TAXES |
31,272 | 6,910 | |||
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Income tax expense |
(5,134) | (2,188) | |||
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NET INCOME |
26,138 | 4,722 | |||
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LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
8,767 | 5,078 | |||
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NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION |
$ |
17,371 |
$ |
(356) | |
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BASIC EARNINGS (LOSS) PER COMMON SHARE |
$ |
0.35 |
$ |
(0.01) | |
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DILUTED EARNINGS (LOSS) PER COMMON SHARE |
$ |
0.34 |
$ |
(0.01) | |
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WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: |
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BASIC |
50,338 | 50,098 | |||
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DILUTED |
50,836 | 50,098 | |||
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Tutor Perini Corporation |
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Segment Information |
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Unaudited |
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Reportable Segments |
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Specialty |
Consolidated |
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(in thousands) |
Civil |
Building |
Contractors |
Total |
Corporate |
Total |
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Three Months Ended March 31, 2020 |
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Total revenue |
$ |
580,087 |
$ |
505,082 |
$ |
282,452 |
$ |
1,367,621 |
$ |
— |
$ |
1,367,621 | |||||
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Elimination of intersegment revenue |
(93,458) | (23,318) | (116) | (116,892) |
— |
(116,892) | |||||||||||
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Revenue from external customers |
$ |
486,629 |
$ |
481,764 |
$ |
282,336 |
$ |
1,250,729 |
$ |
— |
$ |
1,250,729 | |||||
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Income (loss) from construction operations |
$ |
46,121 |
$ |
3,516 |
$ |
8,279 |
$ |
57,916 |
$ |
(10,689) |
(a) |
$ |
47,227 | ||||
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Capital expenditures |
$ |
11,192 |
$ |
12 |
$ |
473 |
$ |
11,677 |
$ |
16 |
$ |
11,693 | |||||
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Depreciation and amortization(b) |
$ |
18,616 |
$ |
427 |
$ |
993 |
$ |
20,036 |
$ |
2,775 |
$ |
22,811 | |||||
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Three Months Ended March 31, 2019 |
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Total revenue |
$ |
383,622 |
$ |
436,243 |
$ |
191,527 |
$ |
1,011,392 |
$ |
— |
$ |
1,011,392 | |||||
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Elimination of intersegment revenue |
(50,128) | (2,777) |
— |
(52,905) |
— |
(52,905) | |||||||||||
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Revenue from external customers |
$ |
333,494 |
$ |
433,466 |
$ |
191,527 |
$ |
958,487 |
$ |
— |
$ |
958,487 | |||||
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Income (loss) from construction operations |
$ |
41,745 |
$ |
3,133 |
$ |
(7,488) |
$ |
37,390 |
$ |
(14,477) |
(a) |
$ |
22,913 | ||||
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Capital expenditures |
$ |
14,012 |
$ |
55 |
$ |
123 |
$ |
14,190 |
$ |
222 |
$ |
14,412 | |||||
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Depreciation and amortization(b) |
$ |
9,370 |
$ |
503 |
$ |
1,064 |
$ |
10,937 |
$ |
2,780 |
$ |
13,717 | |||||
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(a) |
Consists primarily of corporate general and administrative expenses. |
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(b) |
Depreciation and amortization is included in income (loss) from construction operations. |
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Tutor Perini Corporation |
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Condensed Consolidated Balance Sheets |
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Unaudited |
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As of March 31, |
As of December 31, |
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(in thousands, except share and per share amounts) |
2020 |
2019 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents ($86,126 and $103,850 related to variable interest entities ("VIEs")) |
$ |
198,122 |
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$ |
193,685 |
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Restricted cash |
5,956 | 8,416 | |||
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Restricted investments |
75,409 | 70,974 | |||
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Accounts receivable ($80,794 and $91,090 related to VIEs) |
1,501,557 | 1,354,519 | |||
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Retainage receivable ($86,033 and $89,132 related to VIEs) |
573,151 | 562,375 | |||
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Costs and estimated earnings in excess of billings ($30,739 and $22,764 related to VIEs) |
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1,155,202 |
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1,123,544 |
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Other current assets ($55,458 and $58,128 related to VIEs) |
211,501 | 197,473 | |||
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Total current assets |
3,720,898 | 3,510,986 | |||
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PROPERTY AND EQUIPMENT ("P&E"), net of accumulated depreciation of $401,805 and $388,147 (net P&E of $41,474 and $49,919 related to VIEs) |
502,611 | 509,685 | |||
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GOODWILL |
205,143 | 205,143 | |||
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INTANGIBLE ASSETS, NET |
149,458 | 155,270 | |||
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OTHER ASSETS |
108,296 | 104,693 | |||
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TOTAL ASSETS |
$ |
4,686,406 |
$ |
4,485,777 | |
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES: |
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Current maturities of long-term debt |
$ |
184,954 |
$ |
124,054 | |
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Accounts payable ($78,304 and $93,848 related to VIEs) |
744,222 | 682,699 | |||
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Retainage payable ($16,333 and $13,967 related to VIEs) |
272,533 | 252,181 | |||
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Billings in excess of costs and estimated earnings ($421,236 and $422,847 related to VIEs) |
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891,164 |
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844,389 |
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Accrued expenses and other current liabilities ($16,008 and $25,402 related to VIEs) |
197,582 | 206,533 | |||
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Total current liabilities |
2,290,455 | 2,109,856 | |||
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LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $20,259 and $23,343 |
717,379 | 710,422 | |||
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DEFERRED INCOME TAXES |
37,580 | 35,686 | |||
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OTHER LONG-TERM LIABILITIES |
198,064 | 199,288 | |||
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TOTAL LIABILITIES |
3,243,478 | 3,055,252 | |||
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COMMITMENTS AND CONTINGENCIES |
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EQUITY |
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Stockholders' equity: |
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Preferred stock - authorized 1,000,000 shares ($1 par value), none issued |
— |
— |
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Common stock - authorized 75,000,000 shares ($1 par value), issued and outstanding 50,541,480 and 50,278,816 shares |
50,577 | 50,279 | |||
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Additional paid-in capital |
1,120,487 | 1,117,972 | |||
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Retained earnings |
331,362 | 313,991 | |||
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Accumulated other comprehensive loss |
(43,128) | (42,100) | |||
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Total stockholders' equity |
1,459,298 | 1,440,142 | |||
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Noncontrolling interests |
(16,370) | (9,617) | |||
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TOTAL EQUITY |
1,442,928 | 1,430,525 | |||
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TOTAL LIABILITIES AND EQUITY |
$ |
4,686,406 |
$ |
4,485,777 | |
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Tutor Perini Corporation |
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Condensed Consolidated Statements of Cash Flows |
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Unaudited |
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Three Months Ended March 31, |
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(in thousands) |
2020 |
2019 |
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Cash Flows from Operating Activities: |
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Net income |
$ |
26,138 |
$ |
4,722 | |
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Adjustments to reconcile net income to net cash used in operating activities: |
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Depreciation |
16,999 | 12,831 | |||
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Amortization of intangible assets |
5,812 | 886 | |||
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Share-based compensation expense |
4,244 | 5,506 | |||
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Change in debt discount and deferred debt issuance costs |
3,486 | 3,174 | |||
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Deferred income taxes |
2,474 | 142 | |||
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Gain on sale of property and equipment |
(461) | (107) | |||
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Changes in other components of working capital |
(90,884) | (154,192) | |||
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Other long-term liabilities |
1,061 | 2,177 | |||
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Other, net |
(2,876) | 76 | |||
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NET CASH USED IN OPERATING ACTIVITIES |
(34,007) | (124,785) | |||
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Cash Flows from Investing Activities: |
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Acquisition of property and equipment |
(11,693) | (14,412) | |||
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Proceeds from sale of property and equipment |
583 | 201 | |||
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Investment in securities |
(9,696) | (8,357) | |||
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Proceeds from maturities and sales of investments in securities |
6,211 | 3,324 | |||
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NET CASH USED IN INVESTING ACTIVITIES |
(14,595) | (19,244) | |||
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Cash Flows from Financing Activities: |
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Proceeds from debt |
348,688 | 394,000 | |||
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Repayment of debt |
(283,915) | (259,691) | |||
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Cash payments related to share-based compensation |
(694) | (2,364) | |||
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Distributions paid to noncontrolling interests |
(13,500) | (4,000) | |||
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Contributions from noncontrolling interests |
— |
2,798 | |||
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NET CASH PROVIDED BY FINANCING ACTIVITIES |
50,579 | 130,743 | |||
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Net increase (decrease) in cash, cash equivalents and restricted cash |
1,977 | (13,286) | |||
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Cash, cash equivalents and restricted cash at beginning of period |
202,101 | 119,863 | |||
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Cash, cash equivalents and restricted cash at end of period |
$ |
204,078 |
$ |
106,577 | |
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Tutor Perini Corporation |
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Backlog Information |
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Unaudited |
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Revenue |
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New Awards in the |
Recognized in the |
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Backlog at |
Three Months Ended |
Three Months Ended |
Backlog at |
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(in millions) |
December 31, 2019 |
March 31, 2020(a) |
March 31, 2020 |
March 31, 2020 |
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Civil |
$ |
6,037.2 |
$ |
178.5 |
$ |
(486.6) |
$ |
5,729.1 | |||
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Building |
2,790.3 | 183.0 | (481.8) | 2,491.5 | |||||||
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Specialty Contractors |
2,393.6 | 225.7 | (282.3) | 2,337.0 | |||||||
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Total |
$ |
11,221.1 |
$ |
587.2 |
$ |
(1,250.7) |
$ |
10,557.6 | |||
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(a) New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts. |
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